(f) Recovery of overpayments
(1) Use of repayment plans
(A) In general
If the repayment, within 30 days by a provider of services or supplier, of an overpayment under this subchapter would constitute a hardship (as described in subparagraph (B)), subject to subparagraph (C), upon request of the provider of services or supplier the Secretary shall enter into a plan with the provider of services or supplier for the repayment (through offset or otherwise) of such overpayment over a period of at least 6 months but not longer than 3 years (or not longer than 5 years in the case of extreme hardship, as determined by the Secretary). Interest shall accrue on the balance through the period of repayment. Such plan shall meet terms and conditions determined to be appropriate by the Secretary.
(B) Hardship
(i) In general
For purposes of subparagraph (A), the repayment of an overpayment (or overpayments) within 30 days is deemed to constitute a hardship if—
(I) in the case of a provider of services that files cost reports, the aggregate amount of the overpayments exceeds 10 percent of the amount paid under this subchapter to the provider of services for the cost reporting period covered by the most recently submitted cost report; or
(II) in the case of another provider of services or supplier, the aggregate amount of the overpayments exceeds 10 percent of the amount paid under this subchapter to the provider of services or supplier for the previous calendar year.
(ii) Rule of application
The Secretary shall establish rules for the application of this subparagraph in the case of a provider of services or supplier that was not paid under this subchapter during the previous year or was paid under this subchapter only during a portion of that year.
(iii) Treatment of previous overpayments
If a provider of services or supplier has entered into a repayment plan under subparagraph (A) with respect to a specific overpayment amount, such payment amount under the repayment plan shall not be taken into account under clause (i) with respect to subsequent overpayment amounts.
(C) Exceptions
Subparagraph (A) shall not apply if—
(i) the Secretary has reason to suspect that the provider of services or supplier may file for bankruptcy or otherwise cease to do business or discontinue participation in the program under this subchapter; or
(ii) there is an indication of fraud or abuse committed against the program.
(D) Immediate collection if violation of repayment plan
If a provider of services or supplier fails to make a payment in accordance with a repayment plan under this paragraph, the Secretary may immediately seek to offset or otherwise recover the total balance outstanding (including applicable interest) under the repayment plan.
(E) Relation to no fault provision
Nothing in this paragraph shall be construed as affecting the application of section 1395gg(c) of this title (relating to no adjustment in the cases of certain overpayments).
(2) Limitation on recoupment
(A) In general
In the case of a provider of services or supplier that is determined to have received an overpayment under this subchapter and that seeks a reconsideration by a qualified independent contractor on such determination under section 1395ff(b)(1) of this title, the Secretary may not take any action (or authorize any other person, including any medicare contractor, as defined in subparagraph (C)) to recoup the overpayment until the date the decision on the reconsideration has been rendered. If the provisions of section 1395ff(b)(1) of this title (providing for such a reconsideration by a qualified independent contractor) are not in effect, in applying the previous sentence any reference to such a reconsideration shall be treated as a reference to a redetermination by the fiscal intermediary or carrier involved.
(B) Collection with interest
Insofar as the determination on such appeal is against the provider of services or supplier, interest on the overpayment shall accrue on and after the date of the original notice of overpayment. Insofar as such determination against the provider of services or supplier is later reversed, the Secretary shall provide for repayment of the amount recouped plus interest at the same rate as would apply under the previous sentence for the period in which the amount was recouped.
(C) Medicare contractor defined
For purposes of this subsection, the term “medicare contractor” has the meaning given such term in section 1395zz(g) of this title.
(3) Limitation on use of extrapolation
A medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines that—
(A) there is a sustained or high level of payment error; or
(B) documented educational intervention has failed to correct the payment error.
There shall be no administrative or judicial review under
section 1395ff of this title, section 1395
oo of this title, or otherwise, of determinations by the Secretary of sustained or high levels of payment errors under this paragraph.
(4) Provision of supporting documentation
In the case of a provider of services or supplier with respect to which amounts were previously overpaid, a medicare contractor may request the periodic production of records or supporting documentation for a limited sample of submitted claims to ensure that the previous practice is not continuing.
(5) Consent settlement reforms
(A) In general
The Secretary may use a consent settlement (as defined in subparagraph (D)) to settle a projected overpayment.
(B) Opportunity to submit additional information before consent settlement offer
Before offering a provider of services or supplier a consent settlement, the Secretary shall—
(i)
communicate to the provider of services or supplier—
(I) that, based on a review of the medical records requested by the Secretary, a preliminary evaluation of those records indicates that there would be an overpayment;
(II) the nature of the problems identified in such evaluation; and
(III) the steps that the provider of services or supplier should take to address the problems; and
(ii) provide for a 45-day period during which the provider of services or supplier may furnish additional information concerning the medical records for the claims that had been reviewed.
(C) Consent settlement offer
The Secretary shall review any additional information furnished by the provider of services or supplier under subparagraph (B)(ii). Taking into consideration such information, the Secretary shall determine if there still appears to be an overpayment. If so, the Secretary—
(i) shall provide notice of such determination to the provider of services or supplier, including an explanation of the reason for such determination; and
(ii)
in order to resolve the overpayment, may offer the provider of services or supplier—
(I) the opportunity for a statistically valid random sample; or
(II) a consent settlement.
The opportunity provided under clause (ii)(I) does not waive any appeal rights with respect to the alleged overpayment involved.
(D) Consent settlement defined
For purposes of this paragraph, the term “consent settlement” means an agreement between the Secretary and a provider of services or supplier whereby both parties agree to settle a projected overpayment based on less than a statistically valid sample of claims and the provider of services or supplier agrees not to appeal the claims involved.
(6) Notice of over-utilization of codes
The Secretary shall establish, in consultation with organizations representing the classes of providers of services and suppliers, a process under which the Secretary provides for notice to classes of providers of services and suppliers served by the contractor in cases in which the contractor has identified that particular billing codes may be overutilized by that class of providers of services or suppliers under the programs under this subchapter (or provisions of subchapter XI insofar as they relate to such programs).
(7) Payment audits
(A) Written notice for post-payment audits
Subject to subparagraph (C), if a medicare contractor decides to conduct a post-payment audit of a provider of services or supplier under this subchapter, the contractor shall provide the provider of services or supplier with written notice (which may be in electronic form) of the intent to conduct such an audit.
(B) Explanation of findings for all audits
Subject to subparagraph (C), if a medicare contractor audits a provider of services or supplier under this subchapter, the contractor shall—
(i) give the provider of services or supplier a full review and explanation of the findings of the audit in a manner that is understandable to the provider of services or supplier and permits the development of an appropriate corrective action plan;
(ii) inform the provider of services or supplier of the appeal rights under this subchapter as well as consent settlement options (which are at the discretion of the Secretary);
(iii) give the provider of services or supplier an opportunity to provide additional information to the contractor; and
(iv) take into account information provided, on a timely basis, by the provider of services or supplier under clause (iii).
(C) Exception
Subparagraphs (A) and (B) shall not apply if the provision of notice or findings would compromise pending law enforcement activities, whether civil or criminal, or reveal findings of law enforcement-related audits.
(8) Standard methodology for probe sampling
The Secretary shall establish a standard methodology for medicare contractors to use in selecting a sample of claims for review in the case of an abnormal billing pattern.
(h) Use of recovery audit contractors
(1) In general
Under the Program, the Secretary shall enter into contracts with recovery audit contractors in accordance with this subsection for the purpose of identifying underpayments and overpayments and recouping overpayments under this subchapter with respect to all services for which payment is made under this subchapter. Under the contracts—
(A) payment shall be made to such a contractor only from amounts recovered;
(B)
from such amounts recovered, payment—
(i) shall be made on a contingent basis for collecting overpayments; and
(ii) may be made in such amounts as the Secretary may specify for identifying underpayments; and
(C) the Secretary shall retain a portion of the amounts recovered which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of activities conducted under the recovery audit program under this subsection.
(2) Disposition of remaining recoveries
The amounts recovered under such contracts that are not paid to the contractor under paragraph (1) or retained by the Secretary under paragraph (1)(C) or paragraph (10) shall be applied to reduce expenditures under this subchapter.
(3) Nationwide coverage
The Secretary shall enter into contracts under paragraph (1) in a manner so as to provide for activities in all States under such a contract by not later than January 1, 2010 (not later than December 31, 2010, in the case of contracts relating to payments made under part C or D).
(4) Audit and recovery periods
Each such contract shall provide that audit and recovery activities may be conducted during a fiscal year with respect to payments made under this subchapter—
(A) during such fiscal year; and
(B) retrospectively (for a period of not more than 4 fiscal years prior to such fiscal year).
(5) Waiver
The Secretary shall waive such provisions of this subchapter as may be necessary to provide for payment of recovery audit contractors under this subsection in accordance with paragraph (1).
(6) Qualifications of contractors
(A) In general
The Secretary may not enter into a contract under paragraph (1) with a recovery audit contractor unless the contractor has staff that has the appropriate clinical knowledge of, and experience with, the payment rules and regulations under this subchapter or the contractor has, or will contract with, another entity that has such knowledgeable and experienced staff.
(B) Ineligibility of certain contractors
The Secretary may not enter into a contract under paragraph (1) with a recovery audit contractor to the extent the contractor is a fiscal intermediary under section 1395h of this title, a carrier under section 1395u of this title, or a medicare administrative contractor under section 1395kk–1 of this title.
(C) Preference for entities with demonstrated proficiency
In awarding contracts to recovery audit contractors under paragraph (1), the Secretary shall give preference to those risk entities that the Secretary determines have demonstrated more than 3 years direct management experience and a proficiency for cost control or recovery audits with private insurers, health care providers, health plans, under the Medicaid program under subchapter XIX, or under this subchapter.
(7) Construction relating to conduct of investigation of fraud
A recovery of an overpayment to a individual or entity by a recovery audit contractor under this subsection shall not be construed to prohibit the Secretary or the Attorney General from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from such overpayment.
(8) Annual report
The Secretary shall annually submit to Congress a report on the use of recovery audit contractors under this subsection. Each such report shall include information on the performance of such contractors in identifying underpayments and overpayments and recouping overpayments, including an evaluation of the comparative performance of such contractors and savings to the program under this subchapter.
(9) Special rules relating to parts C and D
The Secretary shall enter into contracts under paragraph (1) to require recovery audit contractors to—
(A) ensure that each MA plan under part C has an anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan;
(B) ensure that each prescription drug plan under part D has an anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan;
(C) examine claims for reinsurance payments under
section 1395w–115(b) of this title to determine whether prescription drug plans submitting such claims incurred costs in excess of the allowable reinsurance costs permitted under paragraph (2) of that section; and
(D) review estimates submitted by prescription drug plans by private plans with respect to the enrollment of high cost beneficiaries (as defined by the Secretary) and to compare such estimates with the numbers of such beneficiaries actually enrolled by such plans.
(10) Use of certain recovered funds
(A) In general
After application of paragraph (1)(C), the Secretary shall retain a portion of the amounts recovered by recovery audit contractors for each year under this section which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of, subject to subparagraph (B), carrying out sections 1395l(z), 1935m(l)(16), and 1395kk–1(a)(4)(G) of this title, carrying out section 514(b) of the Medicare Access and CHIP Reauthorization Act of 2015, and implementing strategies (such as claims processing edits) to help reduce the error rate of payments under this subchapter. The amounts retained under the preceding sentence shall not exceed an amount equal to 15 percent of the amounts recovered under this subsection, and shall remain available until expended.
See References in Text note below.
(B) Limitation
Except for uses that support claims processing (including edits) or system functionality for detecting fraud, amounts retained under subparagraph (A) may not be used for technological-related infrastructure, capital investments, or information systems.
(C) No reduction in payments to recovery audit contractors
Nothing in subparagraph (A) shall reduce amounts available for payments to recovery audit contractors under this subsection.
Amendment of Section
Pub. L. 114–198, title VII, § 704(c)(1), (g)(1), July 22, 2016, 130 Stat. 749, 751, provided that, applicable to prescription drug plans (and MA–PD plans) for plan years beginning on or after Jan. 1, 2019, this section is amended by adding at the end the following new subsection:
(j) Expanding Activities of Medicare drug integrity contractors (MEDICs)
(1) Access to information
Under contracts entered into under this section with Medicare drug integrity contractors (including any successor entity to a Medicare drug integrity contractor), the Secretary shall authorize such contractors to directly accept prescription and necessary medical records from entities such as pharmacies, prescription drug plans, MA–PD plans, and physicians with respect to an individual in order for such contractors to provide information relevant to the determination of whether such individual is an at-risk beneficiary for prescription drug abuse, as defined in section 1395w–104(c)(5)(C) of this title.
(2) Requirement for acknowledgment of referrals
If a PDP sponsor or MA organization refers information to a contractor described in paragraph (1) in order for such contractor to assist in the determination described in such paragraph, the contractor shall—
(A) acknowledge to the sponsor or organization receipt of the referral; and
(B) in the case that any PDP sponsor or MA organization contacts the contractor requesting to know the determination by the contractor of whether or not an individual has been determined to be an individual described in such paragraph, shall inform such sponsor or organization of such determination on a date that is not later than 15 days after the date on which the sponsor or organization contacts the contractor.
(3) Making data available to other entities
(A) In general
For purposes of carrying out this subsection, subject to subparagraph (B), the Secretary shall authorize MEDICs to respond to requests for information from PDP sponsors and MA organizations, State prescription drug monitoring programs, and other entities delegated by such sponsors or organizations using available programs and systems in the effort to prevent fraud, waste, and abuse.
(B) HIPAA compliant information only
Information may only be disclosed by a MEDIC under subparagraph (A) if the disclosure of such information is permitted under the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note).
See 2016 Amendment note below.
References in Text
Section 202(b) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (d)(2)(B), is section 202(b) of Pub. L. 104–191, which amended sections 1395h and 1395u of this title.
Section 1395l(z) of this title, referred to in subsec. (h)(10)(A), probably means the subsec. (z) of section 1395l of this title which relates to medical review of spinal subluxation services and was added by Pub. L. 114–10, title V, § 514(a), Apr. 16, 2015, 129 Stat. 171.
Section 514(b) of the Medicare Access and CHIP Reauthorization Act of 2015, referred to in subsec. (h)(10)(A), is section 514(b) of Pub. L. 114–10, which is set out as a note under section 1395l of this title.
Amendments
2016—Subsec. (j). Pub. L. 114–198 added subsec. (j).
2015—Subsec. (g)(1)(A). Pub. L. 114–115, § 9(b)(1), inserted “or otherwise” after “eligible entities” in introductory provisions.
Subsec. (g)(1)(A)(i). Pub. L. 114–115, § 9(b)(2), inserted “to review claims data” after “algorithms” and substituted “provider, service, time, or patient” for “service, time, or patient”.
Subsec. (g)(1)(A)(ii). Pub. L. 114–115, § 9(b)(3)(A), inserted “to investigate and recover amounts with respect to suspect claims” after “appropriate actions”.
Subsec. (g)(1)(A)(iv). Pub. L. 114–115, § 9(b)(3)(B)–(5), added cl. (iv).
Subsec. (g)(3). Pub. L. 114–10, § 510, added par. (3).
Subsec. (h)(2). Pub. L. 114–10, § 505(b)(1), inserted “or paragraph (10)” after “paragraph (1)(C)”.
Subsec. (h)(10). Pub. L. 114–10, § 505(b)(2), added par. (10).
2010—Subsec. (a). Pub. L. 111–148, § 6402(j)(1)(C), inserted “, or otherwise,” after “entities”.
Subsec. (c)(4), (5). Pub. L. 111–148, § 6402(j)(1)(A), added par. (4) and redesignated former par. (4) as (5)
Subsec. (h)(1). Pub. L. 111–148, § 6411(b)(1), substituted “this subchapter” for “part A or B” in introductory provisions.
Subsec. (h)(2). Pub. L. 111–148, § 6411(b)(2), substituted “this subchapter” for “parts A and B”.
Subsec. (h)(3). Pub. L. 111–148, § 6411(b)(3), inserted “(not later than December 31, 2010, in the case of contracts relating to payments made under part C or D)” after “2010”.
Subsec. (h)(4). Pub. L. 111–148, § 6411(b)(4), substituted “this subchapter” for “part A or B” in introductory provisions.
Subsec. (h)(9). Pub. L. 111–148, § 6411(b)(5), added par. (9).
Subsec. (i). Pub. L. 111–148, § 6402(j)(1)(B), added subsec. (i).
2006—Subsec. (b)(6). Pub. L. 109–171, § 6034(d)(1)(A), added par. (6).
Subsec. (g). Pub. L. 109–171, § 6034(d)(1)(B), added subsec. (g).
Subsec. (h). Pub. L. 109–432 added subsec. (h).
2003—Subsec. (a). Pub. L. 108–173, § 736(c)(7), substituted “medicare program” for “Medicare program”.
Subsec. (f). Pub. L. 108–173, § 935(a), added subsec. (f).
Effective Date of 2016 Amendment
Amendment by Pub. L. 114–198 applicable to prescription drug plans (and MA–PD plans) for plan years beginning on or after Jan. 1, 2019, see section 704(g)(1) of Pub. L. 114–198, set out as a note under section 1395w–101 of this title.
Effective Date of 2003 Amendment
Pub. L. 108–173, title IX, § 935(b), Dec. 8, 2003, 117 Stat. 2411, provided that:
“(1) Use of repayment plans.— Section 1893(f)(1) of the Social Security Act [42 U.S.C. 1395ddd(f)(1)], as added by subsection (a), shall apply to requests for repayment plans made after the date of the enactment of this Act [Dec. 8, 2003].
“(2) Limitation on recoupment.— Section 1893(f)(2) of the Social Security Act [42 U.S.C. 1395ddd(f)(2)], as added by subsection (a), shall apply to actions taken after the date of the enactment of this Act.
“(3) Use of extrapolation.— Section 1893(f)(3) of the Social Security Act [42 U.S.C. 1395ddd(f)(3)], as added by subsection (a), shall apply to statistically valid random samples initiated after the date that is 1 year after the date of the enactment of this Act.
“(4) Provision of supporting documentation.— Section 1893(f)(4) of the Social Security Act [42 U.S.C. 1395ddd(f)(4)], as added by subsection (a), shall take effect on the date of the enactment of this Act.
“(5) Consent settlement.— Section 1893(f)(5) of the Social Security Act [42 U.S.C. 1395ddd(f)(5)], as added by subsection (a), shall apply to consent settlements entered into after the date of the enactment of this Act.
“(6) Notice of overutilization.— Not later than 1 year after the date of the enactment of this Act, the Secretary [of Health and Human Services] shall first establish the process for notice of overutilization of billing codes under section 1893A(f)(6) [1893(f)(6)] of the Social Security Act [probably means 42 U.S.C. 1395ddd(f)(6)], as added by subsection (a).
“(7) Payment audits.— Section 1893A(f)(7) [1893(f)(7)] of the Social Security Act [probably means 42 U.S.C. 1395ddd(f)(7)], as added by subsection (a), shall apply to audits initiated after the date of the enactment of this Act.
“(8) Standard for abnormal billing patterns.— Not later than 1 year after the date of the enactment of this Act, the Secretary shall first establish a standard methodology for selection of sample claims for abnormal billing patterns under section 1893(f)(8) of the Social Security Act [42 U.S.C. 1395ddd(f)(8)], as added by subsection (a).”
Improving the Sharing of Data Between the Federal Government and State Medicaid Programs
Pub. L. 114–115, § 9, Dec. 28, 2015, 129 Stat. 3135, provided that:
“(a) In General.— The Secretary of Health and Human Services (in this section referred to as the ‘Secretary’) shall establish a plan to encourage and facilitate the participation of States in the Medicare-Medicaid Data Match Program (commonly referred to as the ‘Medi-Medi Program’) under section 1893(g) of the Social Security Act (
42 U.S.C. 1395ddd(g)).
“(b) Program Revisions To Improve Medi-Medi Data Match Program Participation by States.— [Amended this section.]
“(c) Providing States With Data on Improper Payments Made for Items or Services Provided to Dual Eligible Individuals.—
“(1) In general.— The Secretary shall develop and implement a plan that allows each State agency responsible for administering a State plan for medical assistance under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.] access to relevant data on improper or fraudulent payments made under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for health care items or services provided to dual eligible individuals.
“(2) Dual eligible individual defined.— In this section, the term ‘dual eligible individual’ means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.), or enrolled for benefits under part B of title XVIII of such Act (42 U.S.C. 1395j et seq.), and is eligible for medical assistance under a State plan under title XIX of such Act (42 U.S.C. 1396 et seq.) or under a waiver of such plan.”
Extension of Two-Midnight Rule
Pub. L. 113–93, title I, § 111, Apr. 1, 2014, 128 Stat. 1044, as amended by Pub. L. 114–10, title V, § 521, Apr. 16, 2015, 129 Stat. 176, provided that:
“(a) Continuation of Certain Medical Review Activities.— The Secretary of Health and Human Services may continue medical review activities described in the notice entitled ‘Selecting Hospital Claims for Patient Status Reviews: Admissions On or After October 1, 2013’, posted on the Internet website of the Centers for Medicare & Medicaid Services, through through [sic] the end of fiscal year 2015 for such additional hospital claims as the Secretary determines appropriate.
“(b) Limitation.— The Secretary of Health and Human Services shall not conduct patient status reviews (as described in such notice) on a post-payment review basis through recovery audit contractors under section 1893(h) of the Social Security Act (
42 U.S.C. 1395ddd(h)) for inpatient claims with dates of admission October 1, 2013, through September 30, 2015, unless there is evidence of systematic gaming, fraud, abuse, or delays in the provision of care by a provider of services (as defined in section 1861(u) of such Act (
42 U.S.C. 1395x(u))).
“(c) Construction.— Except as provided in subsections (a) and (b), nothing in this section shall be construed as limiting the Secretary’s authority to pursue fraud and abuse activities under such section 1893(h) or otherwise.”
Access to Coordination of Benefits Contractor Database
Pub. L. 109–432, div. B, title III, § 302(b), Dec. 20, 2006, 120 Stat. 2992, provided that:
“The Secretary of Health and Human Services shall provide for access by recovery audit contractors conducting audit and recovery activities under section 1893(h) of the Social Security Act [
42 U.S.C. 1395ddd(h)], as added by subsection (a), to the database of the Coordination of Benefits Contractor of the Centers for Medicare & Medicaid Services with respect to the audit and recovery periods described in paragraph (4) of such section 1893(h).”